Kiwoom Overhauls Two ETFs: 'Korea Tech TOP10' and 'Korea High Dividend'

Kiwoom Asset Management is changing the names of two Exchange Traded Funds (ETFs) currently under its management and is overhauling their underlying index methodologies. The strategy aims to enhance investment efficiency by reflecting changes in market conditions and regulatory factors.

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According to Kiwoom Asset Management on April 29, the two ETFs set for revision are the 'KIWOOM K-Tech TOP10 ETF' and the 'KIWOOM High Dividend ETF.' Their names will be changed to 'KIWOOM Korea Tech TOP10 ETF' and 'KIWOOM Korea High Dividend ETF,' respectively.

The KIWOOM Korea Tech TOP10 ETF is a product that focuses on investing in leading companies within South Korea's artificial intelligence (AI) value chain, such as Samsung Electronics, SK hynix, and Hanmi Semiconductor. In response to the increasing market concentration around large-cap technology stocks, the index methodology has been strengthened. The maximum weight per constituent has been raised from 20% to 25%. In addition, if any individual stock's weight exceeds 30%, ad-hoc rebalancing will be conducted to allow agile responses to market changes. Through these revisions, the ETF is expected to further enhance the effect of focused investment in Korean tech companies.

The KIWOOM Korea High Dividend ETF is a product that concentrates investments in the top 20 stocks by dividend yield among the 500 largest companies listed in Korea by market capitalization. It is a monthly dividend ETF that pays out distributions based on holdings as of the 15th of each month, providing predictable cash flows. Launched in 2008 as Korea’s first high-dividend ETF, it has maintained a stable dividend strategy for 18 years. Through this revision, the high-dividend strategy has been further advanced to reflect the separate taxation system for dividend income. Previously, the selection criteria required a payout ratio below 90%, but following the change, companies must either have a payout ratio of at least 40%, or a payout ratio of at least 25% with a dividend growth rate of at least 10%. Companies whose dividends decreased year-over-year are excluded, restructuring the portfolio to focus on firms with sustainable dividend policies rather than one-off high dividends. The actual rebalancing reflecting the new index methodology will be implemented at the regular rebalancing date in June.

Lim Joomyung, Head of the ETF Solutions Team at Kiwoom Asset Management, stated, "This ETF overhaul reflects two major trends: the changing market structure centered on large-cap technology stocks, and changes in the tax system for dividends. Korea Tech TOP10 will focus more on the domestic AI and semiconductor-led growth structure, while Korea High Dividend aims to improve investment efficiency by selecting high-dividend companies aligned with policy changes."

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